Asbury Automotive Group Announces Record Second Quarter 2020 Financial Results

DULUTH, Ga., July 28, 2020 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the second quarter 2020 of $49.6 million ($2.57 per diluted share) and adjusted net income (a non-GAAP measure) of $48.7 million ($2.52 per diluted share). This compares to net income of $54.9 million ($2.84 per diluted share) and adjusted net income of $45.9 million ($2.38 per diluted share) in the prior year quarter.

Asbury Automotive Group (PRNewsfoto/Asbury Automotive Group, Inc.)

Net income for the second quarter 2020 was adjusted for a $1.2 million ($0.05 per diluted share) legal settlement gain. Net income for the second quarter 2019 was adjusted for an $11.7 million ($0.45 per diluted share) gain on a dealership divestiture and a $0.3 million ($0.01 per diluted share) gain on the sale of real estate.

"We delivered a very strong quarter and proved out the resilience and the flexibility of our business model by delivering a record operating margin of 5.7% and a record low SG&A as a percentage of gross profit of 62.7% in an 11.3 million SAAR environment," said David Hult, Asbury's President and Chief Executive Officer. "Our focus on gross profit combined with our cost restructuring efforts allowed us to remain pro-active and committed to long term growth by moving forward with acquiring 12 Park Place luxury franchises in the Dallas Fort Worth Market under more favorable terms than the prior agreement. This acquisition will add approximately $1.7 billion in expected annualized revenues and transform our total portfolio to 49% luxury stores. With the addition of Park Place, Asbury will be a stronger, more diversified company," Hult continued.

"Finally, I want to thank our teammates across our store network for their unwavering commitment and emphasis on safety during this pandemic; our performance is a direct result of their hard work and service," Hult concluded.

Second Quarter 2020 Highlights

  • New gross profit per vehicle up 33% to $1,924
  • Used retail gross profit per vehicle up 10% to $1,717
  • 20% of used sales transacted online
  • SG&A as a percentage of gross profit decreased 530 basis points to 62.7%
  • Income from operations as percentage of revenue increased 90 basis points to 5.7%
  • Adjusted EPS increased 6%
  • Entered into a definitive agreement to acquire Park Place Dealerships, one of the country's largest and most prominent luxury dealer groups
  • Ended the quarter with total liquidity of $747 million and a net leverage ratio of 1.5x

Additional commentary regarding the second quarter results will be provided during the earnings conference call on July 28, 2020 at 10:00 a.m. Eastern Time.  The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.com/company/investor-relations.   A replay will be available at this site for 30 days.

In addition, a live audio of the call will be accessible to the public by calling (866) 248-8441 (domestic), or (323) 347-3612 (international); passcode – 8703938.  Callers should dial in approximately 5 to 10 minutes before the call begins.

A conference call replay will be available two hours following the call for seven days, and can be accessed by calling (888) 203-1112 (domestic), or (719) 457-0820 (international); passcode – 8703938.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S.  Asbury currently operates 83 dealerships, consisting of 102 franchises, representing 31 domestic and foreign brands of vehicles.  Asbury also operates 24 collision repair centers.  Asbury offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding Asbury's financial position, liquidity, results of operations, market position and dealership portfolio, and other initiatives and future business strategy.  These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements.  These risks and uncertainties include, among other things, the impact of the COVID-19 pandemic, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges, risks associated with Asbury's indebtedness (including available borrowing capacity, compliance with its financial covenants and ability to refinance or repay such indebtedness, on favorable terms), Asbury's relationships with, and the financial stability of, its lenders and lessors, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation, adverse results in litigation and other proceedings, and Asbury's ability to execute its technology initiatives and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, including its ability to complete and realize the expected benefits of the proposed acquisition of the Park Place dealership group. Asbury's ability to capitalize on opportunities to repurchase its debt and equity securities or purchase properties that it currently leases, and Asbury's ability to stay within its targeted range for capital expenditures.  There can be no guarantees that Asbury's plans for future operations will be successfully implemented or that they will prove to be commercially successful.

These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are and will be discussed in Asbury's filings with the U.S. Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.  We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.


ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)

(Unaudited)



For the Three Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



REVENUE:








New vehicle

$

761.8



$

965.2



$

(203.4)



(21)

%

Used vehicle:








Retail

412.6



486.6



(74.0)



(15)

%

Wholesale

34.9



47.0



(12.1)



(26)

%

     Total used vehicle

447.5



533.6



(86.1)



(16)

%

Parts and service

169.2



224.5



(55.3)



(25)

%

Finance and insurance, net

66.6



80.2



(13.6)



(17)

%

TOTAL REVENUE

1,445.1



1,803.5



(358.4)



(20)

%

GROSS PROFIT:








New vehicle

38.6



38.3



0.3



1

%

Used vehicle:








Retail

31.6



34.7



(3.1)



(9)

%

Wholesale

5.5



1.2



4.3



NM

     Total used vehicle

37.1



35.9



1.2



3

%

Parts and service

100.5



140.6



(40.1)



(29)

%

Finance and insurance, net

66.6



80.2



(13.6)



(17)

%

TOTAL GROSS PROFIT

242.8



295.0



(52.2)



(18)

%

OPERATING EXPENSES:








Selling, general and administrative

152.2



200.7



(48.5)



(24)

%

Depreciation and amortization

9.7



9.0



0.7



8

%

Other operating income, net

(1.3)



(0.6)



(0.7)



(117)

%

INCOME FROM OPERATIONS

82.2



85.9



(3.7)



(4)

%

OTHER EXPENSES:








Floor plan interest expense

4.1



10.5



(6.4)



(61)

%

Other interest expense, net

11.8



13.6



(1.8)



(13)

%

Gain on divestiture



(11.7)



11.7



100

%

Total other expenses, net

15.9



12.4



3.5



28

%

INCOME BEFORE INCOME TAXES

66.3



73.5



(7.2)



(10)

%

Income tax expense

16.7



18.6



(1.9)



(10)

%

NET INCOME

$

49.6



$

54.9



$

(5.3)



(10)

%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

2.58



$

2.87



$

(0.29)



(10)

%

Diluted—








Net income

$

2.57



$

2.84



$

(0.27)



(10)

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

19.2



19.1



0.1



1

%

Restricted stock



0.1



(0.1)



(100)

%

Performance share units

0.1



0.1





%

Diluted

19.3



19.3





%


______________________________

NMNot Meaningful


 

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)



For the Three Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



Unit sales








New vehicle:








Luxury

4,359



5,746



(1,387)



(24)

%

Import

11,610



15,256



(3,646)



(24)

%

Domestic

4,091



5,447



(1,356)



(25)

%

     Total new vehicle

20,060



26,449



(6,389)



(24)

%

Used vehicle retail

18,400



22,259



(3,859)



(17)

%

Used to new ratio

91.7

%


84.2

%


750 bps




Average selling price








New vehicle

$

37,976



$

36,493



$

1,483



4

%

Used vehicle retail

22,424



21,861



563



3

%

Average gross profit per unit








New vehicle:








Luxury

$

3,854



$

3,341



$

513



15

%

Import

1,077



623



454



73

%

Domestic

2,273



1,762



511



29

%

Total new vehicle

1,924



1,448



476



33

%

Used vehicle retail

1,717



1,559



158



10

%

Finance and insurance, net

1,732



1,647



85



5

%

Front end yield (1)

3,557



3,145



412



13

%

Gross margin








New vehicle:








Luxury

6.9

%


6.1

%


80 bps




Import

3.7

%


2.2

%


150 bps




Domestic

5.3

%


4.4

%


90 bps




Total new vehicle

5.1

%


4.0

%


110 bps




Used vehicle retail

7.7

%


7.1

%


60 bps




Parts and service

59.4

%


62.6

%


(320) bps




Total gross profit margin

16.8

%


16.4

%


40 bps




SG&A metrics








Rent expense

$

5.9



$

6.8



$

(0.9)



(13)

%

Total SG&A as a percentage of gross profit

62.7

%


68.0

%


(530) bps




SG&A, excluding rent expense as a percentage of gross profit

60.3

%


65.7

%


(540) bps




Operating metrics








Income from operations as a percentage of revenue

5.7

%


4.8

%


90 bps




Income from operations as a percentage of gross profit

33.9

%


29.1

%


480 bps




Adjusted income from operations as a percentage of revenue

5.6

%


4.7

%


90 bps




Adjusted income from operations as a percentage of gross profit

33.4

%


29.0

%


440 bps




Revenue mix








New vehicle

52.7

%


53.5

%





Used vehicle retail

28.6

%


27.1

%





Used vehicle wholesale

2.4

%


2.6

%





Parts and service

11.7

%


12.4

%





Finance and insurance

4.6

%


4.4

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

15.9

%


13.0

%





Used vehicle retail

13.0

%


11.7

%





Used vehicle wholesale

2.3

%


0.4

%





Parts and service

41.4

%


47.7

%





Finance and insurance

27.4

%


27.2

%





     Total gross profit

100.0

%


100.0

%






_____________________________

(1)

Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net),
divided by combined new and used retail unit sales.


 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (In millions)

(Unaudited)



For the Three Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



Revenue








New vehicle:








Luxury

$

243.5



$

315.5



$

(72.0)



(23)

%

Import

319.7



392.8



(73.1)



(19)

%

Domestic

158.3



200.7



(42.4)



(21)

%

     Total new vehicle

721.5



909.0



(187.5)



(21)

%

Used Vehicle:








Retail

399.8



454.8



(55.0)



(12)

%

Wholesale

34.0



45.1



(11.1)



(25)

%

     Total used vehicle

433.8



499.9



(66.1)



(13)

%

Parts and service

162.4



213.1



(50.7)



(24)

%

Finance and insurance

63.8



75.3



(11.5)



(15)

%

Total revenue

$

1,381.5



$

1,697.3



$

(315.8)



(19)

%









Gross profit








New vehicle:








Luxury

$

16.8



$

19.2



$

(2.4)



(13)

%

Import

11.3



8.7



2.6



30

%

Domestic

8.1



8.5



(0.4)



(5)

%

     Total new vehicle

36.2



36.4



(0.2)



(1)

%

Used Vehicle:








Retail

30.0



32.9



(2.9)



(9)

%

Wholesale

5.5



1.3



4.2



NM

     Total used vehicle

35.5



34.2



1.3



4

%

Parts and service:








Customer pay

52.1



76.4



(24.3)



(32)

%

Warranty

16.5



21.5



(5.0)



(23)

%

Wholesale parts

4.7



5.3



(0.6)



(11)

%

     Parts and service, excluding reconditioning and preparation

73.3



103.2



(29.9)



(29)

%

Reconditioning and preparation

23.3



30.3



(7.0)



(23)

%

Total parts and service

96.6



133.5



(36.9)



(28)

%

Finance and insurance

63.8



75.3



(11.5)



(15)

%

Total gross profit

$

232.1



$

279.4



$

(47.3)



(17)

%









SG&A expense

$

146.8



$

190.0



$

(43.2)



(23)

%

SG&A expense as a percentage of gross profit

63.2

%


68.0

%


(480) bps





_____________________________

Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.


 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Three Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



Unit sales








New vehicle:








Luxury

4,359



5,731



(1,372)



(24)

%

Import

10,915



14,011



(3,096)



(22)

%

Domestic

3,710



5,007



(1,297)



(26)

%

     Total new vehicle

18,984



24,749



(5,765)



(23)

%

Used vehicle retail

17,753



20,696



(2,943)



(14)

%

Used to new ratio

93.5

%


83.6

%


990

bps











Average selling price








New vehicle

$

38,006



$

36,729



$

1,277



3

%

Used vehicle retail

22,520



21,975



545



2

%









Average gross profit per unit








New vehicle:








Luxury

$

3,854



$

3,350



$

504



15

%

Import

1,035



621



414



67

%

Domestic

2,183



1,698



485



29

%

Total new vehicle

1,907



1,471



436



30

%

Used vehicle retail

1,690



1,590



100



6

%

Finance and insurance, net

1,737



1,657



80



5

%

Front end yield (1)

3,539



3,182



357



11

%









Gross margin








New vehicle:








Luxury

6.9

%


6.1

%


80

bps



Import

3.5

%


2.2

%


130

bps



Domestic

5.1

%


4.2

%


90

bps



Total new vehicle

5.0

%


4.0

%


100

bps



Used vehicle retail

7.5

%


7.2

%


30

bps



Parts and service:








Parts and service, excluding reconditioning and preparation

45.1

%


48.4

%


(330)

bps



Parts and service, including reconditioning and preparation

59.5

%


62.6

%


(310)

bps



Total gross profit margin

16.8

%


16.5

%


30

bps




_____________________________

Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.


(1)

 Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net),
divided by combined new and used retail unit sales.


 

ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)

(Unaudited)



For the Six Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



REVENUE:








New vehicle

$

1,583.9



$

1,837.0



$

(253.1)



(14)

%

Used vehicle:








Retail

858.6



944.8



(86.2)



(9)

%

Wholesale

82.1



98.7



(16.6)



(17)

%

     Total used vehicle

940.7



1,043.5



(102.8)



(10)

%

Parts and service

390.8



442.1



(51.3)



(12)

%

Finance and insurance, net

137.0



151.7



(14.7)



(10)

%

TOTAL REVENUE

3,052.4



3,474.3



(421.9)



(12)

%

GROSS PROFIT:








New vehicle

75.0



76.2



(1.2)



(2)

%

Used vehicle:








Retail

62.8



68.3



(5.5)



(8)

%

Wholesale

5.0



2.1



2.9



138

%

     Total used vehicle

67.8



70.4



(2.6)



(4)

%

Parts and service

235.4



275.9



(40.5)



(15)

%

Finance and insurance, net

137.0



151.7



(14.7)



(10)

%

TOTAL GROSS PROFIT

515.2



574.2



(59.0)



(10)

%

OPERATING EXPENSES:








Selling, general and administrative

346.9



391.7



(44.8)



(11)

%

Depreciation and amortization

19.2



17.6



1.6



9

%

Franchise rights impairment

23.0





23.0



%

Other operating expense, net

8.9



1.2



7.7



NM


INCOME FROM OPERATIONS

117.2



163.7



(46.5)



(28)

%

OTHER EXPENSES (INCOME):








Floor plan interest expense

11.1



20.7



(9.6)



(46)

%

Other interest expense, net

28.8



27.5



1.3



5

%

Loss on extinguishment of long-term debt, net

20.6





20.6



%

Gain on dealership divestitures, net

(33.7)



(11.7)



(22.0)



(188)

%

Total other expenses, net

26.8



36.5



(9.7)



(27)

%

INCOME BEFORE INCOME TAXES

90.4



127.2



(36.8)



(29)

%

Income tax expense

21.3



31.4



(10.1)



(32)

%

NET INCOME

$

69.1



$

95.8



$

(26.7)



(28)

%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

3.60



$

4.99



$

(1.39)



(28)

%

Diluted—








Net income

$

3.58



$

4.96



$

(1.38)



(28)

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

19.2



19.2





%

Restricted stock







%

Performance share units

0.1



0.1





%

Diluted

19.3



19.3





%


______________________________

NMNot Meaningful

 

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)



For the Six Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



Unit sales








New vehicle:








Luxury

9,351



10,908



(1,557)



(14)

%

Import

24,068



29,699



(5,631)



(19)

%

Domestic

8,618



9,951



(1,333)



(13)

%

     Total new vehicle

42,037



50,558



(8,521)



(17)

%

Used vehicle retail

38,687



43,342



(4,655)



(11)

%

Used to new ratio

92.0

%


85.7

%


630

bps



Average selling price








New vehicle

$

37,679



$

36,335



$

1,344



4

%

Used vehicle retail

22,194



21,799



395



2

%

Average gross profit per unit








New vehicle:








Luxury

$

3,604



$

3,511



$

93



3

%

Import

964



717



247



34

%

Domestic

2,100



1,668



432



26

%

Total new vehicle

1,784



1,507



277



18

%

Used vehicle retail

1,623



1,576



47



3

%

Finance and insurance, net

1,697



1,616



81



5

%

Front end yield (1)

3,404



3,154



250



8

%

Gross margin








New vehicle:








Luxury

6.5

%


6.3

%


20

bps



Import

3.3

%


2.6

%


70

bps



Domestic

5.0

%


4.2

%


80

bps



Total new vehicle

4.7

%


4.1

%


60

bps



Used vehicle retail

7.3

%


7.2

%


10

bps



Parts and service

60.2

%


62.4

%


(220)

bps



Total gross profit margin

16.9

%


16.5

%


40

bps



SG&A metrics








Rent expense

$

12.7



$

13.6



$

(0.9)



(7)

%

Total SG&A as a percentage of gross profit

67.3

%


68.2

%


(90)

bps



SG&A, excluding rent expense as a percentage of gross profit

64.9

%


65.8

%


(90)

bps



Operating metrics








Income from operations as a percentage of revenue

3.8

%


4.7

%


(90)

bps



Income from operations as a percentage of gross profit

22.7

%


28.5

%


(580)

bps



Adjusted income from operations as a percentage of revenue

4.9

%


4.8

%


10

bps



Adjusted income from operations as a percentage of gross profit

29.0

%


28.9

%


10

bps



Revenue mix








New vehicle

51.9

%


52.9

%





Used vehicle retail

28.1

%


27.2

%





Used vehicle wholesale

2.7

%


2.8

%





Parts and service

12.8

%


12.7

%





Finance and insurance

4.5

%


4.4

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

14.6

%


13.3

%





Used vehicle retail

12.1

%


11.9

%





Used vehicle wholesale

1.0

%


0.4

%





Parts and service

45.7

%


48.0

%





Finance and insurance

26.6

%


26.4

%





     Total gross profit

100.0

%


100.0

%






_____________________________

(1)

Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net),
divided by combined new and used retail unit sales.

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (In millions)

(Unaudited)



For the Six Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



Revenue








New vehicle:








Luxury

$

519.2



$

603.0



$

(83.8)



(14)

%

Import

643.0



752.4



(109.4)



(15)

%

Domestic

304.7



356.4



(51.7)



(15)

%

     Total new vehicle

1,466.9



1,711.8



(244.9)



(14)

%

Used Vehicle:








Retail

804.3



881.4



(77.1)



(9)

%

Wholesale

77.4



92.3



(14.9)



(16)

%

     Total used vehicle

881.7



973.7



(92.0)



(9)

%

Parts and service

365.9



417.7



(51.8)



(12)

%

Finance and insurance, net

128.2



141.5



(13.3)



(9)

%

Total revenue

$

2,842.7



$

3,244.7



$

(402.0)



(12)

%









Gross profit








New vehicle:








Luxury

$

33.8



$

38.3



$

(4.5)



(12)

%

Import

20.6



19.1



1.5



8

%

Domestic

15.0



14.9



0.1



1

%

     Total new vehicle

69.4



72.3



(2.9)



(4)

%

Used Vehicle:








Retail

58.3



64.7



(6.4)



(10)

%

Wholesale

5.0



2.1



2.9



138

%

     Total used vehicle

63.3



66.8



(3.5)



(5)

%

Parts and service:








Customer pay

124.5



149.7



(25.2)



(17)

%

Warranty

36.2



42.1



(5.9)



(14)

%

Wholesale parts

9.3



10.8



(1.5)



(14)

%

     Parts and service, excluding reconditioning and preparation

170.0



202.6



(32.6)



(16)

%

Reconditioning and preparation

50.7



58.3



(7.6)



(13)

%

Total parts and service

220.7



260.9



(40.2)



(15)

%

Finance and insurance

128.2



141.5



(13.3)



(9)

%

Total gross profit

$

481.6



$

541.5



$

(59.9)



(11)

%









SG&A expense

$

325.3



$

369.1



$

(43.8)



(12)

%

SG&A expense as a percentage of gross profit

67.5

%


68.2

%


(70) bps





_____________________________

Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Six Months
Ended June 30,


Increase
(Decrease)


%
Change


2020


2019



Unit sales








New vehicle:








Luxury

9,336



10,863



(1,527)



(14)

%

Import

22,255



26,853



(4,598)



(17)

%

Domestic

7,306



8,959



(1,653)



(18)

%

     Total new vehicle

38,897



46,675



(7,778)



(17)

%

Used vehicle retail

35,983



40,206



(4,223)



(11)

%

Used to new ratio

92.5

%


86.1

%


640 bps












Average selling price








New vehicle

$

37,712



$

36,675



$

1,037



3

%

Used vehicle retail

22,352



21,922



430



2

%









Average gross profit per unit








New vehicle:








Luxury

$

3,620



$

3,526



$

94



3

%

Import

926



711



215



30

%

Domestic

2,053



1,663



390



23

%

Total new vehicle

1,784



1,549



235



15

%

Used vehicle retail

1,620



1,609



11



1

%

Finance and insurance, net

1,712



1,629



83



5

%

Front end yield (1)

3,417



3,206



211



7

%









Gross margin








New vehicle:








Luxury

6.5

%


6.4

%


10 bps




Import

3.2

%


2.5

%


70 bps




Domestic

4.9

%


4.2

%


70 bps




Total new vehicle

4.7

%


4.2

%


50 bps




Used vehicle retail

7.2

%


7.3

%


(10) bps




Parts and service:








Parts and service, excluding reconditioning and preparation

46.5

%


48.5

%


(200) bps




Parts and service, including reconditioning and preparation

60.3

%


62.5

%


(220) bps




Total gross profit margin

16.9

%


16.7

%


20 bps





_____________________________

Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.



(1)

Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net),
divided by combined new and used retail unit sales.

 

ASBURY AUTOMOTIVE GROUP, INC.

Additional Disclosures (In millions)

(Unaudited)



June 30,
2020


December 31,
2019


Increase
(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

613.2



$

3.5



$

609.7



17,420

%

New vehicle inventory

474.1



802.6


(a) 

(328.5)



(41)

%

Used vehicle inventory

125.2



140.1


(b)

(14.9)



(11)

%

Parts inventory

37.1



42.3


(c) 

(5.2)



(12)

%

Total current assets

1,591.7



1,602.6



(10.9)



(1)

%

Floor plan notes payable

526.2



788.0


(d)

(261.8)



(33)

%

Total current liabilities

893.2



1,247.0



(353.8)



(28)

%









CAPITALIZATION:








Long-term debt (including current portion)

$

1,233.5


*

$

939.4


(e) 

$

294.1



31

%

Shareholders' equity

713.1



646.3



66.8



10

%

Total

$

1,946.6



$

1,585.7



$

360.9



23

%


*Includes $237.0 million drawn on the Revolver as of March 31, 2020


(a) Excluding $56.3 million of new vehicle inventory classified as Assets held for sale as of December 31, 2019

(b) Excluding $8.6 million of used vehicle inventory classified as Assets held for sale as of December 31, 2019

(c) Excluding $2.8 million of parts inventory classified as Assets held for sale as of December 31, 2019

(d) Excluding $62.8 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of December 31, 2019

(e) Excluding $28.1 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2019

 


June 30, 2020


December 31, 2019

DAYS SUPPLY




New vehicle inventory

52


66

Used vehicle inventory

26


29


_____________________________

Days supply of inventory is calculated based on new and used inventory levels at the end of each reporting period and a 30-day historical cost of sales.

 

Brand Mix - New Vehicle Revenue by Brand-  


For the Six Months Ended
June 30,


2020


2019

Luxury:




Mercedes-Benz

8

%


7

%

Lexus

6

%


6

%

BMW

6

%


6

%

Acura

4

%


4

%

Infiniti

2

%


3

%

Other luxury

7

%


7

%

Total luxury

33

%


33

%

Imports:




Honda

18

%


19

%

Toyota

13

%


12

%

Nissan

6

%


9

%

Other imports

7

%


5

%

Total imports

44

%


45

%

Domestic:




Ford

10

%


10

%

Chevrolet

6

%


6

%

Dodge

4

%


3

%

Other domestics

3

%


3

%

Total domestic

23

%


22

%

Total New Vehicle Revenue

100

%


100

%

 

ASBURY AUTOMOTIVE GROUP INC.
Supplemental Disclosures
(Unaudited)

Non-GAAP Financial Disclosure and Reconciliation

In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with GAAP. These measures include "Adjusted leverage ratio," "Adjusted income from operations," "Adjusted net income," " Adjusted operating margins," and "Adjusted diluted earnings per share ("EPS")." Further, management assesses the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance at our existing locations. Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. Management cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In their evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. Because these non-core, unusual or non-recurring charges and gains materially affect Asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items.  In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance.

The following tables provide reconciliations for our non-GAAP metrics:


For the Twelve Months Ended


June 30, 2020


March 31, 2020


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt

$

1,233.5



$

1,164.9






Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):




Net Income

$

157.7



$

163.0






Add:




Depreciation and amortization

37.7



37.1


Income tax expense

49.5



51.5


Swap and other interest expense

57.0



58.5


Earnings before interest, taxes, depreciation and amortization
("EBITDA")

$

301.9



$

310.1






Non-core items - expense (income):




Gain on dealership divestitures

$

(33.7)



$

(45.4)


Legal settlements

(2.7)



$

(1.5)


Gain on sale of real estate

(0.3)



(0.6)


Franchise rights impairment

30.1



30.1


Real estate-related charges

0.6



0.6


Park Place deal termination costs

11.6



11.6


Loss on debt extinguishment

20.7



20.7


  Total non-core items

26.3



15.5






Adjusted EBITDA

$

328.2



$

325.6






Adjusted leverage ratio

3.8



3.6


 






For the Three Months Ended
June 30,


2020


2019


(In millions, except per
share data)

Adjusted income from operations:




Income from operations

$

82.2



$

85.9


Legal settlements

(1.2)




Gain on sale of real estate



(0.3)


Adjusted income from operations

$

81.0



$

85.6










Adjusted net income:




Net income

$

49.6



$

54.9






Non-core items - (income) expense:




Gain on dealership divestiture



(11.7)


Legal settlements

(1.2)




Gain on sale of real estate



(0.3)


Income tax effect on non-core items above

0.3



3.0


Total non-core items

(0.9)



(9.0)


Adjusted net income

$

48.7



$

45.9






Adjusted diluted earnings per share (EPS):




Diluted EPS

$

2.57



$

2.84






Total non-core items

(0.05)



(0.46)


Adjusted diluted EPS

$

2.52



$

2.38






Weighted average common shares outstanding - diluted

19.3



19.3


 


For the Six Months
Ended June 30,


2020


2019


(In millions, except per
share data)

Adjusted income from operations:




Income from operations

$

117.2



$

163.7


Legal settlements

(2.1)




Gain on sale of real estate

(0.3)



(0.3)


Park Place deal termination costs

11.6




Franchise rights impairment

23.0




Fixed assets write-off



2.4


Adjusted income from operations

$

149.4



$

165.8






Adjusted net income:




Net income

$

69.1



$

95.8






Non-core items - (income) expense:




Gain on dealership divestitures

(33.7)



(11.7)


Legal settlements

(2.1)




Gain on sale of real estate

(0.3)



(0.3)


Park Place deal termination costs

11.6




Loss on extinguishment of debt

20.7




Franchise rights impairment

23.0




Fixed assets write-off



2.4


Income tax effect on non-core items above

(4.9)



2.4


Total non-core items

14.3



(7.2)


Adjusted net income

$

83.4



$

88.6






Adjusted diluted earnings per share (EPS):




Diluted EPS

$

3.58



$

4.96






Total non-core items

0.74



(0.37)


Adjusted diluted EPS

$

4.32



$

4.59






Weighted average common shares outstanding - diluted

19.3



19.3



 

 

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SOURCE Asbury Automotive Group, Inc.

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